As usual, this helps separate the true Libertarians from the Corporate Libertarians. True Libertarians may think that the government has no business doing a lot of the things it does, but id it is going to be a purchaser in the market then it is a market participant like anyone else. If you don't like the conditions, don't sell to the government (and if the policy is sufficiently unpopular, government will not be able to obtain the desired goods and services and it will need to change its demands, as is the case in a free market).
Corporate Libertarians, i.e.,those who feign to adhere to the philosophy of small government until they want government to do something for them, are outraged at this "meddling in the free market." Because while it does not warp the "free market" for the government to dump a ton of public money into the mix, it does if the government actually negotiates like a real honest to God market participant.